When establishing a business, the enterprise must pay taxes to the state authorities. Taxes increase funding for the State and help State agencies maintain, operate, stabilize and develop society. Nowadays many people start to establish and operate their own businesses, followed by tax obligations associated with the businesses. Particularly, this article of LSX legal firm will provide: “Taxes that construction businesses have to pay in Vietnam”
Legal grounds
- Law on Enterprise 2020
- Law on Investment 2020
Taxes that construction businesses have to pay in Vietnam
License tax (license fee)
A fee directly charged to the charter capital or investment capital of an enterprise.
Regulations on license tax declaration:
- Declare once when the fee payer first comes to production, business, or newly established.
- The deadline for paying license fees: January 30 of the calendar year.
From February 25, 2020 License fee exemption in the first year of establishment or production and business activities (from January 1 to December 31) for:
- Newly established company.
- During the license fee exemption period, if an enterprise establishes a branch, representative office or business location, the branch, representative office, or business location is exempt from license fees.
Value Added Tax (VAT)
Value added tax belongs to the indirect taxes, calculated on the added value of goods and services from the process of production, and circulation to consumption.
Deadline for VAT declaration:
- In case the enterprise declares on a monthly basis, the deadline for submission: 20 days from the end of that month.
- In case an enterprise declares quarterly, the deadline for submission: 30 days from the end of that quarter.
- VAT payment deadline: The same as the deadline for submitting VAT declarations.
Corporate Income Tax (CIT)
Corporate income tax is a direct tax, collected on the final results of production and business activities of enterprises.
Regulations on CIT declaration:
- According to Article 17 of Circular 151/2014/TT-BTC dated October 10, 2014, of the Ministry of Finance: Enterprises do not have to make provisional CIT declarations, just need to based on the results of their production and business activities. The enterprise calculates the temporary payment amount no later than the 30th day from the end of the quarter in which the tax liability arises.
- CIT finalization: The deadline for filing is the 90th day from the end of the calendar year or fiscal year. From July 1, 2020, according to Law on Tax Administration 38/2019/QH14, the deadline for filing CIT finalization is the last day of the third month from the end of the calendar year or fiscal year.
Personal Income Tax (PIT)
Personal income tax levied on the income of earning employees.
Regulations on personal income tax declaration:
- Enterprises declare and pay PIT on a monthly basis (in case the enterprise declares VAT on a monthly basis and the payable PIT amount in the month from 50 million VND or more): No later than the 20th day of the following month.
- Enterprises that declare and pay PIT quarterly (in case the enterprise declares VAT quarterly or the enterprise declares VAT on a monthly basis and the payable PIT amount in the month less than 50 million VND): No later than the 30th of the following quarter.
Procedures to establish a construction company
Step 1: Prepare the dossiers to register the business
the Vietnamese alphabet, the letters F, J, Z, W, numbers, and symbols. Also, displays the headquarters, branches, representative offices, and business locations of the enterprise and printed or written on transaction documents, records, and printed materials published by the enterprise.
Also, address of the business: The company must have a specific, clear, and accurate address. The head office of the business cannot be an apartment building or a dormitory.
Capital: Companies must declare the level of charter capital in accordance with the provisions of the law when doing business in the household electrical appliances
Shareholders/Founding members: a joint-stock company, a limited liability company with two or more members, or a partnership must specify the capital contribution ratio together with individual legal papers such as ID card or passport.
Legal representative: can be one or more depending on the needs of the company. When submitting a business registration application, the company must provide personal information along with the title of the representative. In case the legal representative is hired by the company, it is necessary to provide a labor contract and appointment decision.
Business registration lines: Enterprises can search and choose the appropriate business lines in Decision No. 27/2018/QD-Ttg regulating the operating system of Vietnam’s economic sectors.
Step 2: Submit an application at the Department of Planning and Investment to apply for a certificate of business registration
Application for the business registration:
- Business registration application form;
- Company charter;
- List of members as well as shareholders (for Multi-member limited liability companies and Joint-stock companies);
- Authenticated copies of:
- Valid ID card or valid Passport for individuals;
- Business registration certificate/ Investment registration certificate for organizations (except in case the organization as a Ministry/ People’s Committee of a province or city) together with personal identification papers, authorization decision of the authorized representative of the organization;
- Decision on capital contribution for members as organizations.
After preparing all the documents mentioned above, then the person wishing to establish an enterprise shall submit the application for the establishment of an enterprise at the one-stop Department of the Business Registration Office of the Department of Planning and Investment where the enterprise intends to locate.
Within 03 working days from the date of receipt of the application, if the application valid, then the Business Registration Office will issue an enterprise registration certificate to the enterprise.
In case the application is not valid, the Business Registration Office must notify in writing the content that needs to be amended and supplemented to the enterprise.
Step 3: Engrave the business seal
Currently, the Law does not stipulate the procedures for notifying the enterprise’s seal sample. The seal will be engraved by the enterprise itself and are responsible for it.
In case you apply for our service, within 01 day from the date the company has the Certificate of Business Registration, LSX will engrave the legal entity seal for your company.
Step 4: Post-establishment procedures
After granted the business registration certificate of a construction company, the enterprise needs to perform the following tasks:
- Within 30 days from the date of receipt of the business registration certificate; the enterprise must publish the business registration contents.
- Within 90 days from the date of being granted the business registration certificate; members and shareholders must fully contribute the registered capital.
- The company must make a register of members (register of shareholders) immediately after being granted the Certificate of Business Registration.
- Declare the license fee.
- Signboard at the company headquarters.
- Open a business bank account.
- Notice of seal sample to the business registration office.
- Tax registration for the first time.
- Notice of application of tax calculation method.
- Apply invoice.
- Register to use a digital signature.
- Labor declaration, payment of social insurance for employees.
- …
Legal service of LSX Legal Firm
LSX legal firm provides legal services to clients in various legal areas. To make your case convenient, LSX will perform:
- Legal advice related to new regulations;
- Representing in drafting and editing documents;
- We commit the papers to be valid, and legal for use in all cases;
- Represent to submit documents, receive results, and hand them over to customers.
With a team of experienced, reputable, and professional consultants; The firm is always ready to support and work with clients to solve legal difficulties.
Furthermore, using our service, you do not need to do the paperwork yourself; We guarantee to help you prepare documents effectively and legally.
Also, you will not have to waste time preparing the application, submitting application, or receiving results. At those stages, we will help you do it smoothly.
After all, LSX provides the service with the desire that customers can experience it the best way. Additionally, we guarantee the cost to be the most suitable and economical for customers.
Finally, hope this article is useful for you to answer the question about “Taxes that construction businesses have to pay in Vietnam”. If you need any further information, please contact LSX Law firm: +84846175333 or Email: [email protected]
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Related questions
Business registration application form;
Company charter;
List of members as well as shareholders (for Multi-member limited liability companies and Joint-stock companies);
Authenticated copies of related legal papers.
Expenses that business have to pay when setting up a construction business:
State fee, service fees for certificate application, seal, 03 years digital signature, electronic invoice application, initial tax declaration, register for electronic tax declaration account, register for business bank account,…
First, you must meet the basic conditions according to the law to apply for registration to establish a construction company.
Vietnamese from 18 years old and above who meet the requirements for legal status.
Registering to establish a civil or industrial construction company does not require the capital, qualifications, and experience of the business.
However, if registering for professions such as structural design, architecture, and construction supervision. Then the business owner and co-founder of the business need to have a practicing certificate and the company’s charter capital requirements.
For most of the construction industry, the current law does not require conditions on capital contributors, charter capital, experience, certificates as well as degrees. However, for business lines related to construction design and construction supervision, a practicing certificate is required.
Conclusion: So the above is Taxes that construction businesses have to pay in Vietnam. Hopefully with this article can help you in life, please always follow and read our good articles on the website: lsxlawfirm.com
